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City braces for P&G hit

The entrance to Brockville's Procter and Gamble facility is shown on Thursday in Brockville. The departure in three years’ time of the city’s, and the region’s, third largest employer stands to rip a large hole in Brockville’s assessment. (RONALD ZAJAC/The Recorder and Times)

City corporate services director David Dick said Thursday Procter and Gamble, the city’s biggest industrial employer, is giving the city an estimated $510,000 in property taxes this year, a number that dropped from $800,000 in 2016 as a result of a reassessment.

That revenue item is set to shrink even further as P&G begins winding down operations and packing up.

P&G announced Wednesday it is closing the Brockville plant, part of a “North American Supply Network Design” that will relocate remaining local production of Bounce and Swiffer products to a new site in West Virginia.

The transitions are planned to be complete by early 2020 and will result in the permanent closure of the Brockville site by late 2020 or early 2021.

Company spokesman Jeff LeRoy confirmed the city plant employs 480 people full-time, as well as approximately 100 more who are either part-time or temporary.

The decision comes, coincidentally, as city hall considers eliminating vacancy rebates that, among other things, give property owners a tax rebate of 35 per cent for vacant industrial units.

Should the city do away with those rebates, however, it will not mean that city hall will continue to collect half a million dollars a year from P&G after its California Avenue site is emptied out. That’s because the company can appeal to the Municipal Property Assessment Corporation (MPAC) to lower its assessment as the site becomes vacant, something the provincial corporation would do independently of any city tax rebates.

“I suspect that the reassessed value on a vacant building would be a lot less than it would be fully operational,” said Dick.

Meanwhile, another six-digit revenue source for the city will dry up a lot more quickly: P&G’s water and sewer rates, which have brought in an average of $320,000 a year.

A city statement in the immediate aftermath of the closure announcement noted city officials had, for the past few years, “been working closely with plant management to increase the cost-effectiveness and sustainability of the business in Brockville,” including “providing adjustments in their taxes and water rates.”

Dick on Thursday said the water rate adjustments were in fact the result of a recent overall reform in water and sewer billing.

“That certainly helped them,” said Dick.

He estimated P&G saved 10 to 15 per cent on its water and sewer bills, but was not sure how much of that reduction was based on the rate reform and how much on reduced consumption.

As for tax relief, P&G applied for a vacancy rebate in 2016 for part of its facility, said Dick, who estimates that led to an additional saving of $18,000.

While city hall’s revenue will suffer directly from the loss of Brockville’s biggest plant, it’s harder to estimate what this latest exodus of jobs will mean in the longer term for the city’s overall assessment growth.

“From a community perspective, certainly the loss of employment is huge,” said Dick.

In the immediate wake of the announcement Wednesday, mayor David Henderson referred to the so-called Black October of 2002, when the city lost 1,000 high-tech jobs in a month.

“In today’s market, 480 is roughly the equivalent,” said Henderson. “It’s significant right across this region.”

Brockville’s worst economic news in more than a decade hit just as the city’s new economic development director, Rob Nolan, has been settling into his new job.

“It was a bit of a baptism by fire,” he said.

Nolan spent all of Wednesday dealing with the blow, including a meeting with company officials in the afternoon.

“Clearly they understand that the closure’s having a significant impact, not just on the employees but the community as well,” said Nolan.

P&G officials told him they needed the next few days to deal with the affected employees, but they will meet with city officials next week to discuss the next steps, including the city’s efforts to market the site to other employers.

“Next week, I think, we’ll have a much clearer view of a lot of these issues,” said Nolan.

P&G will put together a team that will look at the Brockville site’s future as it winds down operations, said LeRoy.

“I’ve already had requests come in from two, three, four potential buyers of equipment,” he added.

It’s too early to talk about what will happen to that equipment or the site, said LeRoy.

He praised Henderson’s handling of a difficult situation and said the company will work with the city going forward.